TaxJar Sales Tax Automation Integration with Inform ERP

The system creates new tax codes with a TaxJar prefix of TJ followed by the state. For example, New Jersey tax codes are created as TJNJ. Inquiring under the ERP’s File > Customer > Tax > TJNJ, no tax percentage numbers are seen. The TaxJar integration looks these rates up in real-time during quote/order entry.  For non-taxable customers, the system creates a corresponding non-taxable jurisdiction with an "E" at the end.  For example, TJNJE is the New Jersey tax exempt code.

We encourage the use of TaxJar Sales Tax Reporting. TaxJar provides accurate, detailed reports for sales and sales tax collected by state and local jurisdiction and estimated sales tax. Inform ERP still provides our standard jurisdictional tax reporting, but sales transactions calculated using TaxJar have substantially more information available, presented only when using the TaxJar reporting

TaxJar has the ability to automate tax filing to the states. Automated filing requires no user overrides of line items or miscellaneous charge taxable status on orders. This can be prevented by configuring access levels to limit taxability changes.

DDI is certified by TaxJar, and the integration requires certification approved settings and system workflow. The implementation has some complexities, requiring the deployment and use of a Sandbox test system before deploying the new tax automation to your live Inform ERP system.

Implementation overview

• Deployment testing using an Inform ERP Sandbox to adjust your system and test the integration including Tax Codes, Tax Nexus, Customers, Ship-to’s, Products, Ship Vias, new workflow training, and reporting

• Creation of Inform - TaxJar data table, Customer and Product custom fields

• Upload existing invoices to TaxJar to correctly test and calculate Tax Nexus

• Orientation training

The Customer Master file Tax Code field may be blank for both Customers and Ship-to's. (The tax code is normally a required field, and this is changed during the TaxJar deployment.)

Customer Taxable Status - If a specific customer is tax exempt, you must set the TaxJar Tax-Exempt code in the Customer Master > Custom Fields tab. Non-taxable Customers must have a tax-exempt reason code assigned, or TaxJar will report an error. There are four reason codes in the Custom Field selector: Wholesale, Government, Marketplace, and Other. These are TaxJar codes and are not user configurable. By default, we initialize all non-taxable customers as “Wholesale” during our deployment. You have the ability to update the reason code under File > Customer Master > Custom Fields tab.

Customer Tax Code - Tax rates and tax jurisdiction descriptions are defined by TaxJar automation.

Ship-to Tax Code - The Customer Ship-to Master file Tax Code field may be blank.

Ship-to Taxable Status - If a specific ship-to is tax exempt, you must set the TaxJar Tax-Exempt code in the Customer Ship-to Master > Custom Fields tab. Non-taxable Ship-to’s must have a tax-exempt reason code assigned, or TaxJar will report an error. There are four reason codes in the Custom Field selector: Wholesale, Government, Marketplace, and Other. These are TaxJar codes and are not user configurable. By default, we initialize all non-taxable Ship-to’s as “Wholesale” during our deployment. You have the ability to update the reason code under File > Customer > Ship-to > Custom Fields.

These reason codes are established as Ship-to User Defined Fields (UDFs).

The Inform Product-Customer Tax Matrix is not used with TaxJar. We add a custom field to associate a Product with your selected TaxJar Product Category Code. The category code is passed to TaxJar to override the normal tax status of a product. The spreadsheet linked below is a curated list of TaxJar Product Codes that a user needs to use to override taxability for a product. The user categorizes the product for TaxJar so it is properly reported on within TaxJar sales tax reporting. To download the spreadsheet containing all TaxJar Product Category Codes and their Descriptions, you can click here.

The taxable check box on the General tab of the Product Master is only relevant for Counter sales / Pick Up orders. These Pick-up ship-via transactions bypass the TaxJar system to minimize the API calls and transaction charges.

The Freight Taxable Status is determined automatically and enabled/disabled on the tax code.

TaxJar Product Category Code is required for TaxJar to accept Miscellaneous Charges

TaxJar uses the tax codes assigned to pick up ship vias.   Pick up ship vias are designated by the Pick Up check box on the ship via master.   For orders with a Pick Up ship via, the system will not call the TaxJar API. This saves transaction fees, particularly for distributors that have high counter sale transactions.

This override is not recommended when using TaxJar automated tax reporting. It cannot be used with TaxJar Autofile. If you are not using automated sales tax filing the sales tax automation can be overridden by assigning a tax code a branch.

This override is not recommended when using TaxJar automated tax reporting. It cannot be used with TaxJar Autofile. You can override sales tax automation by changing the sales order header sales tax code to an Inform tax code. For example, a state may offer discounted tax rates under certain qualifications, such as an Urban Enterprise Zone with a sales tax rate lower than the State Tax.

If necessary, you can override the taxable checkbox at the line item level.

The Inform ERP TaxJar integration generates TaxJar transaction fees in two ways, sales order edits and invoice uploads. Except for counter sale and pickup orders, most Inform price quotes and sales orders trigger one or more TaxJar API calls.

• Each Price Quote created triggers the TaxJar sales tax calculation API. Each subsequent edit triggers the TaxJar API, unless the quote edit does not potentially impact the sales tax calculation
  If the quote Ship Via is Pick up, and is configured with an Inform tax rate, the API call is skipped and does incur the fee

• Each Sales Order triggers the TaxJar sales tax calculation API. Each subsequent edit triggers the TaxJar API, unless the sales order edit does not potentially impact the sales tax calculation.
  If an order edit does not potentially impact the sales tax calculation, the API call is skipped and does incur the fee
  If the sales order Ship Via is Pick up, and is configured with an Inform tax rate, the API call is skipped and does not incur the fee

• Each invoice triggers the TaxJar transaction API, where is invoice is uploaded to TaxJar for sales tax reporting

• Many Inform ERP users fall into the TaxJar 5,000 to 25,000 order transactions per month subscription range